Housing Affordability Discussion Paper January 2013
Planning & Development
Housing Affordability Discussion Paper | January 2013 | City of Coquitlam
Table of Contents Executive Summary __________________________________________________________________________________________________________ ii Introduction_________________________________________________________________________________________________________________ 1
Why This Discussion Paper?_________________________________________________________________________________________________ 1
Proposed Approach_______________________________________________________________________________________________________ 1
What is “Housing Affordability”?________________________________________________________________________________________________ 2 The Housing Continuum_______________________________________________________________________________________________________ 3 The Role of Government_______________________________________________________________________________________________________ 4 Partners: Their Roles and Contributions____________________________________________________________________________________________ 5 Coquitlam’s Current Roles in Promoting Affordable Housing____________________________________________________________________________ 6
City of Coquitlam’s Leadership Highlights______________________________________________________________________________________ 7
Municipal Practices in the Region________________________________________________________________________________________________ 8
Table 1: Municipal Strategies and Actions to Address Housing Affordability____________________________________________________________ 9
Table 2: Number of Non-Market Housing Units in Coquitlam and Benchmark Municipalities______________________________________________ 10
Table 3: Non-Market Housing Developments in Coquitlam and Benchmark Municipalities________________________________________________ 11
Coquitlam Context___________________________________________________________________________________________________________ 12
Housing Affordability Gap _________________________________________________________________________________________________ 13
Demand for Housing Affordability in Coquitlam ________________________________________________________________________________ 14
Anticipated Future Demand for Housing to 2023 _______________________________________________________________________________ 15
Developing a Coquitlam Response_______________________________________________________________________________________________ 16
Density Bonusing________________________________________________________________________________________________________ 19
Affordable Housing Reserve Fund ___________________________________________________________________________________________ 20
Effective Ways to Support Housing Affordability________________________________________________________________________________ 21
Proposed Directions__________________________________________________________________________________________________________ 22 APPENDIX - Summary of Best Practices ___________________________________________________________________________________________ 25 Housing Affordability Discussion Paper | January 2013 | City of Coquitlam
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Executive Summary The Coquitlam Affordable Housing Strategy (AHS) was adopted by Council
•
What is the City’s appropriate role and level of involvement in this policy area?
in 2007, and since then many key objectives and actions in the AHS have
•
What has been the level of involvement and contribution to deal with these
been accomplished. On October 1, 2012, Council directed staff to update the AHS, to define what the City’s role in housing affordability should be over the next decade, incorporate best practices, and to respond to
issues at the regional and other local government levels? •
pursuing the proposed actions?
anticipated housing affordability needs - in a manner that reflects the City’s limited resources and competing demands for municipal funding. This Housing Affordability Discussion Paper provides background information regarding the City’s current role in promoting housing
•
What is the full spectrum of civic infrastructure and amenity needs facing the City and what are the projected costs and possible funding sources?
•
What is the priority for action with respect to housing affordability and appropriate level of funding for Coquitlam relative to other civic needs?
affordability, the role of other partners, best practices in housing affordability, and anticipated affordable housing demand to 2023. Based
The Paper also suggests that a new, updated Housing Affordability Strategy for
on City projections for housing need, approximately 4,000 Coquitlam
Coquitlam needs to address several key areas of investigation in order to develop
households could be spending more than 50 percent of their household
an appropriate ‘Coquitlam response’. These areas include:
income on housing costs by 2023.
•
What current practices should be continued or eliminated;
•
What is the best way to leverage the City’s Affordable Housing Reserve Fund;
•
The use of City resources in addressing affordability; and
excess of the City’s responsibility or resources, and suggests transitioning
•
What planning tools can be used to promote housing affordability.
from this traditional approach to one that is based on the City’s ability
The Paper concludes that the City needs to establish a new housing affordability
to support housing affordability initiatives, in partnership with other
vision and results-based objectives that reflect current realities and focus the
parties, within a context of limited municipal resources and meeting other
City’s efforts where they can be most effective. Next steps in the development
community needs.
of a new, updated Strategy are also outlined, involving a three-phase process
The Discussion Paper identifies the limitations of the traditional approach to affordable housing provision (i.e. largely relying on funding opportunities from senior governments) and a projected demand far in
To assist in initiating this update, the Paper sets out key questions that, depending on Council’s consideration, will set the direction for the updated Housing Affordability Strategy. These questions include:
ii
What are the projected financial and other resource implications of
Housing Affordability Discussion Paper | January 2013 | City of Coquitlam
that will begin with Council discussion regarding the City’s role and priorities in promoting housing affordability.
Introduction Much has been accomplished since the City of Coquitlam adopted the Affordable Housing Strategy in 2007. Since then, the City has been proactive on a number of fronts – provision of land for supportive and emergency shelter housing, establishment of an Affordable Housing Reserve Fund, assistance to providers of cold and wet weather shelter, and negotiating for affordable units during the development process, among other initiatives. The City has also been an active participant in Tri-City and Metro Vancouver undertakings, as well as being advocates to other levels of government.
Why This Discussion Paper?
Proposed Approach
Coming out of the City’s Transit-Oriented Development Strategy (TDS)
While it is timely to revisit this issue area and prepare a new Housing
initiative, in October 2012, Coquitlam Council called for an update of the City’s
Affordability Strategy (HAS), it is critical to first consider a series of questions that
Affordable Housing Strategy. This paper is a review of:
need to lead to decisions to guide the City’s future policies and actions:
•
•
•
What the City has accomplished in the past several years in the implementation of the Affordable Housing Strategy;
sources, plus recognizing Coquitlam’s recent actions as noted in the box above:
What other municipalities have been doing on the affordable housing
what is the City’s appropriate role and level of involvement in this policy area?
front; •
•
what has been the level of involvement and contribution to deal with these issues at the regional and other local government levels?
ownership options; and New approaches and innovative practices being used by providers in the
• •
Before finalizing an updated HAS, consideration needs to be given to the broader community development context: what is the full spectrum of civic
It is intended that this paper will generate productive discussion about the
infrastructure and amenity needs, and what are the projected costs and
options and lead to greater clarity on the roles and priorities that the City may wish to consider and focus on in the next three to five years.
Once Coquitlam’s potential role is ascertained: what are the projected financial and other resource implications of pursuing the proposed actions?
non-market housing sector in response to the reduction of “programbased” government funding.
Recognizing that housing affordability challenges are common across Metro Vancouver and should be addressed on a regional and sub-regional basis:
New approaches and innovative practices in the market housing sector – developers, builders, lenders – to meet the demand for affordable home
•
In light of the information set out in this discussion paper and from other
possible funding sources? •
With greater clarity on the City’s potential role and projected cost implications vis-a-vis promoting housing affordability, and with a broader understanding of the infrastructure and amenity needs of a growing community: what is the priority for action in this area and appropriate level of funding for Coquitlam?
Working through these questions and reaching decisions in that regard will enable the preparation of a realistic, updated HAS for Coquitlam going forward. Housing Affordability Discussion Paper | January 2013 | City of Coquitlam
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What is Housing Affordability? A helpful starting point in reading through this discussion paper is to consider how the terms “Affordable Housing” and “Housing Affordability” are defined. Briefly discussed below are commonly understood definitions of these two terms. It is intended that through the process of preparing an updated HAS, a definition of “Housing Affordability” relevant to Coquitlam can be arrived at.
What is Meant by “Affordable Housing”?
What is Meant by “Housing Affordability”?
There is no definitive, universal definition of “affordable housing”. Local governments in BC frequently use CMHC’s definition – “affordable housing means housing for which an individual or family is spending no more than a certain proportion of its gross household income on shelter costs to secure adequate housing.”
Intended to be broader than the term “affordable housing”, housing affordability refers to a community’s ability to offer a wide variety of housing types, sizes, tenures and prices in order to support more complete and inclusive communities. As the Housing Affordability Strategy is updated Council will consider and provide direction on defining Housing Affordability in a manner appropriate for Coquitlam.
•
For homeowners: No more than 32%.
•
For renters: No more than 30%. Renter households who spend more on shelter are considered to be “in core need” and those who spend more than 50% are “at risk of homelessness”.
The relationship between costs and incomes is the key determinant of how much “housing choice” residents have in any community. The lower the income, the fewer the choices. The 30-32% proportion of gross income cut off for housing to be deemed affordable is a difficult criteria to apply in the context of the highly inflated Metro Vancouver housing market. On the home ownership side, for many years general housing prices have tended to far exceed this threshold for the average income levels in the region causing households seeking a dwelling to resort to various alternatives (e.g. residing with parents longer, down payment assistance from parents, buying in/trading up in the housing market, renting to boarders or having secondary suites as “mortgage helpers”). The City will investigate other potential affordable housing definitions that more broadly align with the concept of ‘affordable living’.
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Housing Affordability Discussion Paper | January 2013 | City of Coquitlam
The Housing Continuum A “housing continuum” is a tool used by governments to organize, describe and visually depict a progression of housing from seasonal shelters through home ownership. In Coquitlam, as elsewhere in Canada, the vast majority of housing is provided by the private sector. Typically, the housing continuum is used by municipalities to identify “gaps and issues”, with respect to housing needs..
NON-MARKET HOUSING
Coquitlam
Seasonal Shelters
Year-Round Emergency Shelters
Transitional Housing
MARKET HOUSING
Supportive Housing
Social Housing
Market Rental Housing
Home Ownership
Government funds mats for overnight stays in churches and other locations November-March.
Non-profit housing providers offer temporary shelter, food, and other support services. Most shelters are open 24/7 and provide three meals a day and support services. Short stay of 30 days or less.
Non-profit housing providers offer stable housing as a step between shelters and permanent housing. Period of 2-3 years, with support services provided on or off-site.
Non-profit housing providers offer permanent housing in purpose-designed buildings or in scattered sites, with ongoing support for people who are not able to live independently.
“Social” or subsidized housing that requires ongoing government subsidies to reduce rents for low income households. Operated by non-market housing providers, BC Housing, Metro Vancouver Housing Corporation and cooperatives.
Private housing makes up most rental housing in Coquitlam. Majority of purpose-designed buildings date prior to 1990. Secondary market includes secondary suites and investor-owned condominiums.
Fee simple, strata ownership, shared equity ownership.
The Tri-Cities Cold Wet Weather Mat program has operated in 3 Coquitlam churches since 2007. Extreme Weather Response shelter spaces are available in PoCo’s Trinity United Church when necessary.
3030 Gordon will be the first permanent emergency shelter in the Tri-Cities.
3030 Gordon will include 30 transitional units.
Como Lake Gardens provides 30 units for women and children at-risk-ofhomelessness.
946 family units and 1,023 seniors units in Coquitlam – 4.8% of all dwellings. (2006 Census)
One-third of Coquitlam’s 9,250 market rental units are purpose built. The rest are in the secondary market. (City of Coquitlam permit data)
75% of homes in Coquitlam are owned.
Housing Affordability Discussion Paper | January 2013 | City of Coquitlam
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The Role of Government Local governments are seen as the agencies responsible for land use
Provincial Government
decisions and development approvals that lead to the housing forms that
BC Housing, as guided by the “Housing Matters” provincial housing strategy
make up the communities within any municipality. In this manner, housing
(2006) acts as the agency responsible for affordable housing delivery. BC Housing
affordability is very much a product of the values of the local community
works with other levels of governments community agencies and health providers
and market forces.
to build new units, maintain existing stock and provide rental assistance.
The provision of non-market and subsidized affordable housing has
Regional Governments
traditionally been seen as the responsibility of senior governments (federal and provincial) with a less defined role in the provision of housing for local governments. However, changes in senior government policy, including less funding for affordable housing, have placed more pressure on local municipalities to be more active in creating housing. However, it is generally recognized that local governments, while often more directly affected by housing affordability issues, lack the resources (i.e. primarily dependent on property tax revenues) to build non-market housing themselves. As such, most new affordable housing units are
Given that many housing issues are region-wide, regional governments such as Metro Vancouver continue to play a role in the preservation of existing units and initiating new projects to help address housing affordability and affordable housing on a regional scale. Importantly the Metro Vancouver Housing Corporation (MVHC) owns and operates several thousand below-market units across the region. The Regional Growth Strategy (RGS) requires all municipalities to prepare and implement ‘Housing Action Plans’. Coquitlam’s 2007 Affordable Housing Strategy is considered a Housing Action Plan.
provided through a coordinated effort between senior governments, local
Local Governments
governments, community agencies and private sector contributions.
The Local Government Act and Community Charter provide a variety of tools for
As Coquitlam explores what role and level of involvement are appropriate
local governments to address housing affordability including:
for this City, it is important to understand the current, general housing
•
policy context in British Columbia.
Federal Government
housing, housing stock diversity, rental housing and special needs housing; •
Canada Mortgage and Housing Corporation(CMHC). Since 1990 competing demands on the federal government have seen a decrease in the number of units produced through federal aid. Over the last ten years the federal government has made many refinements to national programs, often intended to leverage contributions from provincial and local governments. However, overall federal contributions now play a more reduced role.
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Housing Affordability Discussion Paper | January 2013 | City of Coquitlam
Zoning and regulatory mechanisms to encourage affordable housing such as Density Bonusing, and parking reductions;
Between 1946 and the mid-1980’s the federal government was active in building affordable housing units across Canada through agencies such as
Official Community Plans with housing policies that encourage affordable
•
Creation of reserve funds for specified purposes; and
•
Using variable development cost charges or waiving fees for specified purposes such as affordable housing units.
Most local governments in British Columbia have adopted Housing Strategies. While wide-ranging in nature, generally local municipalities have established planning policy to encourage diversity of housing stock, participated in advocacy and research and in some degree, contributed to direct development of affordable housing units.
Partners: Their Roles and Contributions Contributions that currently provide for housing affordability by various governments, agencies and the development community are summarized below.
Other Local Governments •
certain housing issues transcend northeast sector municipal boundaries (e.g. homelessness), and a joint response in partnership with places-of-
Federal Government Support •
Canada Mortgage and Housing Corporation (CMHC) provides seed funding for feasibility studies and development of business plans;
•
Homelessness Partnership Initiative – Capital and Operating funding for housing and support services for people who are homeless or at risk of homelessness;
•
worship and other stakeholders has been put in place as an interm measure. The longer term response to local homelessness, a permanent shelter, has been slated for a site provided by Coquitlam but has not received material support, to date, from our two municipal neighbours. •
At the October 10, 2012 Tri-Cities Joint Council workshop the need and
Mortgage insurance (CMHC backs BC Housing loans – insures at $500
opportunity for joint municipal action with regards to affordable housing
per unit, instead of the $5000/unit it costs private developers).
was explored by a discussion group. The group concluded that it is worth continuing to jointly coordinate local effort, so long as there is clarification
Provincial Government Support (BC Housing) •
In the context of the Tri-Cities it has been recognized on occasion that
and mutual understanding of the respective cities’ roles/priorities regarding this issue.
Housing subsidies, involving: a. Shelter Allowance for Social Assistance recipients; b. Rent geared to Income units in social housing projects (being phased out); c. Rental Assistance Program for low income working families with children under 19;
Non-profit Agencies •
Provision of land;
•
Management of below-market and supportive housing units;
•
Provision of support services to vulnerable populations;
•
Provides low interest loans for construction of affordable housing;
•
Fundraising for capital and operating costs;
•
Operating Grants for Non-profit housing (being phased out).
•
Volunteers to lower construction and operating costs.
Metro Vancouver
Development Community
•
Needs analysis;
•
•
Research on best practices;
Provide lower cost and rental units in exchange for density bonuses and other cost concessions;
•
Advocacy to senior governments;
•
Reduce profit share in order to increase affordability;
•
Regional Affordable Housing Strategy;
•
•
Direct provision of social housing through Metro Vancouver Housing Corporation;
Construction of lower end of market rental units (smaller units, basic finishes) to meet the need of low to moderate income households;
•
Replacement of rental units lost through redevelopment;
•
Waiver of Regional Development Cost Charges for affordable housing.
•
Tenant relocation assistance.
Housing Affordability Discussion Paper | January 2013 | City of Coquitlam
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Coquitlam’s Current Roles in Promoting Housing Affordability Through its various actions to date, the City of Coquitlam is regarded as an active stakeholder in helping create affordable housing in Coquitlam, based on partnerships with other levels of government, private and non-profit housing providers, and community organizations. The City does not directly own or operate any non-market housing. •
The City can play six key roles in facilitating affordable housing of all types as shown in the “Housing Continuum” – from emergency shelter to affordable home ownership through a range of actions:
1
2
Planning
3
Development
4
Strategic Partnerships & Resources
Community Support & Education
6
Advocacy
Research
Provides direction
Regulates and enforces
City partners with
Works with partners
Advocates for
Assembles, analyzes
on how the City,
land use, development,
public, private and
to educate and build
affordable housing
and distributes data
community partners,
building and design
non-profit sectors,
community capacity.
and support services
and other research
and developers can
standards. Provides
and the community
with other levels of
that assist other City
work together to meet
option for affordable
to facilitate the
government, market
staff and partners in
future housing demand
housing as one
development of a range
housing developers
setting priorities for
through its land use
component of density
affordable housing.
and landlords in
expenditure of limited
and strategic
bonus contributions
May lease land, provide
communities.
resources.
policy functions.
(or funds in lieu)
staff time, provide
during rezoning.
regulatory incentives, and has established a Housing Reserve Fund to resource the City’s actions in this area.
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Housing Affordability Discussion Paper | January 2013 | City of Coquitlam
City of Coquitlam’s Leadership Highlights The City’s current AHS identifies roles that Coquitlam can play in relation
City Land and Resources
to affordable housing, sometimes as leader and always in partnerships,
•
City-owned lands provided under long-term, nominal rent leases for housing
and usually with other levels of government, non-market housing
for lone parent families who are at-risk of homelessness (Como Lake
providers and community groups. In implementing the Strategy, the City’s
Gardens), emergency shelter and transitional housing plus City servicing of
initiatives to date have demonstrated strong leadership, particularly its
these lands (3030 Gordon Avenue);
roles in:
•
homelessness and affordable housing; and
Policy and Planning •
Tenants’ assistance policy for mobile home park redevelopments;
•
Affordable Housing Reserve Fund – heading towards $2.5 million;
•
Negotiation for the inclusion of affordable housing units as part of
•
•
Staff resources to participate on local and regional committees on
•
Staff resources to work closely with BC Housing in the selection of an operator, and design and construction of the permanent shelter and transitional housing at 3030 Gordon Avenue.
major private development projects; and
Advocacy and Education
“Housing Choices” as a key component of neighbourhood plans
•
Active participation in the Tri-Cities Homelessness Task Group, Universal
(Austin Heights and Maillardville), which show a range of options,
Access-Ability Advisory Committee, the Metro Vancouver Housing
including multi-family.
Committee and Regional Planning Advisory Committee, and Regional Steering Committee on Homelessness;
New planned growth areas and housing intensification strategies including increased density and more housing options.
•
Strong advocate for capital funding from other levels of government for a permanent emergency shelter in the Tri-Cities;
Development-related Measures •
Density bonusing for affordable housing in key development areas;
•
Zoning for secondary suites in most single detached housing areas;
•
Rezoning for supportive housing for single mothers at Como Lake Gardens (528 Como Lake Avenue);
• •
•
Partnerships with BC Housing, CMHC, and non-profit housing providers in the delivery of government programs;
•
Assistance in enhancing public consultation programs for proposed affordable housing projects; and
•
Research on “best practices” in affordable housing, forecasting housing
Rezoning for permanent emergency shelter and transitional housing
demand, providing data to public, government agencies and other regional
at 3030 Gordon Avenue; and
partners.
Issuing Temporary Use Permits for the operation of a Cold/Wet Weather mat program operated in local churches. Housing Affordability Discussion Paper | January 2013 | City of Coquitlam
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Municipal Practices in The Region The following pages identify the practices that a number of Metro Vancouver municipalities have used to address housing affordability. This is not meant to be a “report card”, as it does not identify how many times a particular practice was used, its effectiveness, nor the size of the municipality’s contribution, financial or otherwise. As shown in Table 1 the tools that are employed most often generally tend to be the tools that municipalities in Metro Vancouver have found most useful and/or practical. Municipalities close to Coquitlam geographically and in population size are included, going from the largest municipality (Surrey) down to the smallest municipality (Port Moody). Tables 2 and 3 provide a snapshot of the number and types of non-market development projects currently in Coquitlam and in selected benchmark municipalities. In general, the larger municipalities tend to use the most tools, although there are several smaller municipalities who have used as many if not more tools (notably, New Westminster). Coquitlam employs fewer fiscal tools than the comparison municipalities, but is quite strong on planning processes and zoning and regulatory actions. The small number of fiscal actions may reflect the fact that Coquitlam has not yet decided on the allocation of funds from the Affordable Housing Reserve Fund. Generally, municipal actions involving direct funding assistance in this policy area is limited given local government’s primary dependence on property taxes as a revenue source. Municipal efforts tend to take a variety of other forms, including policies and incentives to help promote housing affordability.
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Housing Affordability Discussion Paper | January 2013 | City of Coquitlam
Table 1: Summary of Municipal Strategies and Actions to Address Housing Affordability Municipal Actions
Surrey
Burnaby
Richmond
Coquitlam
Yes
Yes
Yes
Yes
Yes
Yes
Langley TSHP
Delta
North Van District
Maple Ridge
New West
Yes
Yes
Yes
Yes
Pending
Port Coquitlam
North Van City
Port Moody
Yes
Yes
FISCAL ACTIONS City owned sites for lease to non-profits Donate City owned land Grants
Yes
Property tax exemption Waive fees & charges
Pending
Yes
Yes Pending
Yes
Pending Yes
Yes
Pending
Some
Yes Some
Some
Some
Land Trust
Exploring
Affordable Housing Reserve Fund
Yes
Affordable Housing Strategy
Pending
Yes
Yes
Yes
Yes
Yes
Pending
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
PLANNING PROCESS OCP Policies
Yes
Identify sites in land use plans
Yes
Yes
Yes
Yes
Pending
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
ZONING/REGULATORY ACTIONS Increased density
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Infill/Innovative housing choices
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Density Bonuses for affordable housing
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Reduced parking for affordable housing
Yes
Yes
Yes
Yes
Reduced parking near transit
Yes
Yes
Inclusionary zoning
Yes
Pending
Yes
Yes
Yes
Yes
Modified building standards Housing Agreements
Yes
Yes Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
APPROVAL PROCESS Fast Tracking
Yes
Provide Approval Assistance
Yes
Yes
Yes Yes
Yes
Rental replacement policies
Yes
Exploring
Demolition Policies
Yes
Yes
Yes
RENTAL HOUSING LOSS PREVENTION
Strata conversion policies
Yes
Yes
Yes
Pending Yes
Yes
Standards of maintenance bylaw Mobile home relocation policy
Yes Yes
Yes Yes
Yes
Yes
Yes
Yes
Pending
Yes
Source: Metro Vancouver, Municipal Survey, November 2012
Housing Affordability Discussion Paper | January 2013 | City of Coquitlam
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Table 2: Number of Non-Market Housing Units* in Coquitlam & Benchmark Municipalities (as of September 2011)
Coquitlam
Port Moody
Port Coquitlam
Maple Ridge/ Pitt Meadows
Surrey
0
0
0
0
125
Non-market Providers
475**
100
525
152
1,119
Cooperatives
471
303
25
287
521
946
403
550
439
1,765
0
0
0
0
521
Non-market Providers
419
66
342
329
914
Cooperatives
604
197
162
145
425
1,023
263
504
474
1,860
Total Family & Seniors Units
1,969
666
1,054
913
3,625
Total # of Dwellings (2006)
41,240
10,125
18,600
30,755
131,140
4.8%
6.6%
5.7%
3%
2.8%
FAMILY UNITS BC Housing Directly Managed
Family Units Subtotal
SENIORS UNITS BC Housing Directly Managed
Seniors Units Subtotal
% Non-market to Total Dwellings Source: CitySpaces derived from BC Housing data, September 2011
* Definition: non-market, social or subsidized housing requires ongoing government subsidies to reduce rents for low and modest income households. Operated and managed by non-market housing providers (e.g., Coquitlam Kinsmen Estates, Chateau de Ville), cooperatives (e.g., Hoy Creek Housing Co-op, Burquitlam Housing Co-op) and BC Housing. ** An additional 30 units of housing for lone parent families at Como Lake Gardens were opened in April 2012.
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Housing Affordability Discussion Paper | January 2013 | City of Coquitlam
Table 3: Non-Market Housing Developments in Coquitlam & Benchmark Municipalities Since 2007 Municipality COQUITLAM
PORT COQUITLAM
PORT MOODY
MAPLE RIDGE
BURNABY
Project
Year
Partners
Municipality’s Contribution
Como Lake Gardens. YWCA 30-unit housing development for low-income women & children at-risk-of-homelessness & in need of support.
2012
BC Housing, YWCA, City of Coquitlam
Provision of land through nominal lease (value of land = $2.5 million)
3030 Gordon. Up to 30 emergency shelter beds and 30 transitional studio apartments for people who are homeless.
2013
BC Housing, City of Coquitlam, Rain City Housing
Provision of land through nominal lease (value of land = $1.3 million)
Earl Haig Retirement Residence. 50-unit housing for low-income seniors.
2011
CMHC, BC Housing, Earl Haig Society (land value = $3 million)
Hawthorne Assisted Living. 70 apartments for low-income seniors.
2007
CMHC, Port Coquitlam Senior Citizens’ Housing Society, BC Housing
RJ Kent Manor. 25 units of subsidized housing for low-income seniors.
2008
BC Housing, Royal Canadian Legion
Iris House. 10 beds for low-income individuals with mental illness.
2009
BC Housing, New View Society (land value = $277,000)
Inlet Centre. 41 seniors supportive housing units, 23 housing units for single women aged 45+, 10-bed hospice, 22 low- to moderate-income family housing units
2003 (most recent)
BC Housing, Greater Vancouver Housing Corporation, Fraser Health Authority, City of Port Moody, Federal Government
Leased land at 35% discount (discount = $700,000)
Alouette Heights. 45 units of supportive housing for people who are homeless or at-risk-ofhomelessness
2012
BC Housing, District of Maple Ridge, Alouette Home Start Society
Donation of land (value of land = $1 million)
The Poppy Residences. 70 supportive apartment units for low-income seniors.
2011
BC Housing, South Burnaby Royal Canadian Legion, City of Burnaby
Provided $227,000 through the Community Benefit Bonus Fund
Wenda’s Place. Nine units of second-stage housing for women & children seeking stability/support when leaving emergency housing.
2009
BC Housing, Canada HRSDC, CMHC, Real Estate Foundation, City of Burnaby
Provided $100,000 through the Community Benefit Housing Funds Program
Housing Affordability Discussion Paper | January 2013 | City of Coquitlam
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Coquitlam Context In many ways Coquitlam is challenged by its own success. Over the last twenty years the City has become a highly desirable location, offering quality amenities, beneficial employment and an enviable location. As Coquitlam and the Vancouver region continue to grow, housing has become disproportionately expensive. Today, many Coquitlam citizens pay a significant proportion of their income on housing. As noted previously, the long standing 30% of household income for housing costs threshold is increasingly difficult to apply locally in light of general market trends. Given our projected growth, community desirability and aging housing stock, housing affordability is expected to be an on-going challenge. Between 1991 and 2011, housing prices and rents in Coquitlam have been rising faster than household incomes, meaning that many households are spending a larger proportion of their income on shelter than they were 20 years ago. While median household income has increased by 23% over these 20 years, the average dwelling value has increased 200% and the average rent has increase 89%. This can result in fewer individuals being able to ”buy into” the market and prevents many hourly wage based workers from residing in Coquitlam.
Housing Cost and Income Changes
2011
$60,880
23% 1991
$1,110
89%
200%
$49,500
$586
$200,050
Median Household Income
Average Rent
Average Dwelling Value
Source: Statistics Canada 1991 & 2006 Census; Real Estate Board of Greater Vancouver
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$600,315
Housing Affordability Discussion Paper | January 2013 | City of Coquitlam
Housing Affordability Gap Housing affordability is primarily based on income. Nationally the Canada Mortgage and Housing (CMHC) guideline suggests that housing costs should not exceed 32% of gross income. As shown in the Home Ownership Affordability Gap illustration, household income for most Coquitlam residents falls short of this guideline. Our current costs of housing presents a particular challenge to service workers, single income families, young adults and seniors.
Home Ownership Affordability Gap
2011 Benchmark Housing Price in Coquitlam 4
32% of Income Affordability Guideline ¹ vs. Annual Home Carrying Cost ²
Annual Carrying Costs ²
Detached House
Townhouse Condo Apartment
1 Affordability Guideline is based on the Canada Mortgage and Housing Corporation (CMHC) guideline that housing costs should not exceed 32% of Gross Income. 2 Annual Carrying Cost is calculated based on mortgage with 10% down on a 5 year fixed term with 4% interest and a 25 year amortization period, plus $4,800/year for taxes, insurance and heat. 3 Incomes are average per category and are based on the BC Stats - 2009 Wage and Salary Survey data for Metro Vancouver. 4
“Benchmark price” is based on the Real Estate Board of Greater Vancouver’s Housing Price Index for Coquitlam. The Housing Price Index Benchmark Price is not an average price, but is modeled on the Consumer Price Index and defines a “typical” home in each housing type.
$25,000
$35,000
$64,500
$73,000
$83,500
Average Annual Income ³
Housing Affordability Discussion Paper | January 2013 | City of Coquitlam
13
Demand for Housing Affordability in Coquitlam According to the 2006 Census there were 41,245 households in
Included within the 26% of households in Coquitlam paying more than 30% for
Coquitlam, of that 26% of households spend more than 30% of their
housing are those defined by CMHC as at Risk of Homelessness*. Specifically,
income on housing. This means that over 10,000 households in
9% of households in Coquitlam are considered to be in need (low income) and
Coquitlam are considered to be challenged by housing costs. Such a
spending at least half of their income on housing (3,560 of all households in
large proportion of households suggests a significant demand exists for
Coquitlam).
housing types, tenures and options that is not being met by the current products offered by the market. As a response households can either choose to move to less expensive cities or invest disproportionately into housing costs.
during the 2011-2012 cold wet weather season. Of these, an estimated 50 are homeless people who are living in the Tri-Cities area, while the remainder were “passing through”. These numbers represent the current un-met demand for
Core Need Households in Coquitlam
32% of renter households 23% of owner households
26% (10,490) of all households spend more than
30% of their income on housing Source: Statistics Canada 2006 Census ‘Risk of Homelessness’ as defined by CMHC
14
In addition, 101 separate individuals used the temporary emergency shelter
Housing Affordability Discussion Paper | January 2013 | City of Coquitlam
below market and supportive housing in the Tri-Cities. Currently Coquitlam has a large proportion of households and individuals across the housing spectrum who need alternative housing options. One of the objectives of an updated Housing Affordability Strategy will be to promote an increase in the types, tenures and choices available in order to reduce the challenges of housing costs.
2011/2012 Tri-Cities Homelessness Count people were counted as 101 homeless in the Tri-Cities
79%
21%
Source: Hope for Freedom Society
Anticipated Future Demand for Housing to 2023 Potential Loss of Existing Affordable Market Rental Units
Working within the market’s ability, Coquitlam has established appropriate new
As Coquitlam evolves and older housing stock is updated or redeveloped
planned areas and intensification strategies to ensure this volume of growth can
projections indicate that somewhere between 700-1000 units of older
be managed and accommodated appropriately.
rental housing could be lost in Coquitlam by 2023. 24% of rental housing
However, the demand for affordable home ownership and designated rental
stock in the City is located near the Burquitlam Skytrain station and may
housing units to meet the needs of people with low to moderate incomes will
be susceptible to redevelopment.
likely exceed what will be provided by the market. At market rates new units
Without policies and incentives in place, the replacement units are likely
will force current low and moderate income households to dedicate increasing
to be market condominium units, which may not be affordable to the
percentages of their income to shelter or be forced to move out of Coquitlam.
tenants currently living in the units that will be demolished.
Projecting our future demand for more affordable housing options is not
Projected Demand for New Growth
precisely possible given:
Additional housing units will be required as the population grows,
•
other jurisdictions)
including affordable home ownership, market rental, low end of market rental, and subsidized (below-market) rental. Based on Metro Vancouver’s
•
Regional Growth Strategy, our population is expected to grow by as much as 50,000 in the next ten years. This growth creates demand for approximately 20,000 additional housing units by 2023.
Anticipated future demand for housing to 2023
The open nature of the housing market in Coquitlam (residents moving to The inability to monitor the growth of illegal suites and unconventional housing options; and,
•
The unpredictable nature of the market
However, overall new demand combined with current deficiencies and the anticipated loss of units due to redevelopment suggest that Coquitlam will
Based on staff analysis and the RGS growth targets there is an estimated
face a shortfall of affordable housing options and a deficit of low and moderate
projected demand for 4,000 of these new units to be below market for
income rental housing in the next ten years.
‘higher need households’, who would otherwise spend more than 50 percent of their income on housing by 2023. This accounts for additional housing units to support growth, combined with current un-met demand and the potential loss of units due to redevelopment. This number includes a minimum of 3,400 rental units.
Housing Affordability Discussion Paper | January 2013 | City of Coquitlam
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Developing a Coquitlam Response Competing Demand on Limited Resources
Importantly, the City as part of any new strategy needs to determine which
As discussed above, affordable housing is considered the primary
segments of the housing continuum our strengths best fit. Coquitlam should
responsibility of more senior governments. Moreover, with access to
consider if its resources should be focused on deep subsidy (as we have
less than 8% of all tax revenues collected, local governments such as
traditionally done) or if our abilities are better suited to address such aspects as
Coquitlam are already significantly challenged to provide required services
market and near market rental and home ownership. The Table “Effective Ways
and amenities in their communities. Within this context the current and
to Support Housing Affordability” on page 21 gives a good overview of which
projected demand for housing is a considerable challenge.
municipal tools best align to advancing housing solutions.
Forecasts suggest that more than 1/4 of all Coquitlam households will
The Use of City Lands
pay more than 30% of their income on housing, while almost 10% will
One of the strategic actions outlined in the 2007 Affordable Housing Strategy
be at risk of homelessness by 2023. The current demand for housing
is the use of City land resources to help meet affordable housing needs. Two
affordability far outpaces the ability for the City to fund direct solutions
City land sites (528 Como Lake Avenue and 3030 Gordon Avenue) have been
on its own; hence if the City is to continue to play a role in this area,
identified for shelter and housing for people who are homeless/at-risk of
involvement of other partners remains essential. Aside from determining
homelessness and are being used for this purpose.
the City’s appropriate role in this area, (a fundamental question to be answered), any such contributions need to be decided on in relation to
The Northeast Coquitlam Area Plan (NECAP) also identifies sites for affordable
other worthy projects such as a range of infrastructure projects, local park
housing; however these sites have not been developed. As part of the process to
amenities and civic facilities.
update the AHS, the use of City lands for affordable housing purposes should be re-examined in the context of other priorities and needs in the community.
Alternatively, the City could focus its efforts at working to reduce, rather than eliminate, the “affordability gap” (the difference between what a household pays for rent and what would be affordable for them). While the criteria that households pays less than 30% of their income on housing is exceeding difficult in the context of the Metro Vancouver housing market, working with other levels of government and stakeholders to ensure households with the most challenges are paying less than half their income on housing may be a goal that is more achievable.
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Housing Affordability Discussion Paper | January 2013 | City of Coquitlam
Developing a Coquitlam Response Planning and Regulatory Approaches
Secondary Suites
One avenue that does hold significant promise towards alleviating
Coquitlam encourages the development of secondary suites in the planning of
housing affordability pressures sits within the City’s regulatory and
single-family residential neighbourhoods. This approach allows concerns related
planning functions. Over the last several years the City of Coquitlam
to secondary suites (such as parking, transportation demand and servicing) to
has adopted many planning responses that have greatly aided housing
be comprehensively addressed at the outset of the community planning process.
affordability in the City. As detailed in Table 1 Summary of Municipal
As a result most new communities within Coquitlam provide secondary suites
Strategies and Actions to Address Housing Affordability (Page 9 above),
that both serve as “mortgage helpers” to new home buyers and as a viable
the City of Coquitlam employs a range of strategies to address housing
affordability choice for new renters.
affordability. Two of the significant planning tools the City has employed are described below.
Housing Choices A relatively new initiative in Coquitlam has been the development of “Housing Choices.” This program allows developers to consider
This approach combined with other regulatory innovations have resulted in 31% of all single-family houses in Coquitlam having a legal secondary suite that is rented out.
Other Planning Tools
alternatives to traditional single family houses including carriage houses,
Additional planning and regulatory innovations that Coquitlam could consider
garden cottages, narrow lot splits, as well as 3 and 4 unit projects on land
(such as lock off suites, smaller unit sizes and redevelopment policies and
formerly occupied by one dwelling.
“affordable living” strategies) are proposed to be explored in Phase Two of the
However, while it may still be too early to tell, most of these approaches
update process.
have not resulted in a substantive amount of new housing. As illustrated in the table below, current take-up of duplex/triplex/quadruplex units may still be burdened by regulatory barriers, static home builder programs, or the stronger profitability of other housing forms.
Housing Affordability Discussion Paper | January 2013 | City of Coquitlam
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Developing a Coquitlam Response Historical Unit Type Breakdown Housing units created by building permit
Housing Type
2012*
2011
2010
2009
2008
Single Family
318
425
217
271
157
Secondary Suite
206
203
107
75
90
Garden Cottage/ Carriage House
13
0
0
0
0
Duplex
16
18
38
16
36
Tri/Quadruplex
0
0
0
0
0
Townhouse
196
284
288
143
240
Apartment
945
733
480
195
377
Demolitions
-156
-144
-96
-48
-88
TOTAL
1538
1519
1034
652
812
*2012 figures are up to November 30, 2012 Overall to date, Garden Cottages and Carriage Houses, and the Triplex/ Quadruplex have not proved popular solutions. Phase Two of the Housing Affordability Strategy update will investigate the causes behind the slow start to this program.
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Housing Affordability Discussion Paper | January 2013 | City of Coquitlam
Density Bonusing Density Bonusing In Coquitlam As allowed for within current legislation the City of Coquitlam has established a density bonus option for those development projects that meet certain criteria. The density bonus mechanism allows the City to receive funds at a decreasing rate above a base density from new development projects for prescribed needs. The City of Coquitlam has established that newly developed large buildings within the City Centre and in other key growth areas such as transit corridors will contribute to both a local amenity fund, and in a much smaller proportion, to an affordable housing reserve fund. Contribution to a local amenity fund is crucial because with increased density comes an increased need for local amenities to support that density. Local recreation and public space improvements can be paid for from this fund . In addition to supporting local amenities, a portion of the density bonusing funds collected are allocated to the Affordable Housing Reserve Fund (AHRF). Based on the existing density bonus system and on current projections, about ten percent of anticipated density bonus funds would be allocated to the AHRF while the remainder of the funds would be earmarked for local amenities (and in the case of City Centre support the development of Lincoln station on the Evergreen Line). As noted on page 1 of this discussion paper, a broader review of the full range of planned or proposed civic projects and facilities is just getting underway. Through this review, the density bonus system will be revisited as a funding source and consideration of the priority of these various projects and needs, including the proportion allocated to help implement an updated housing affordability strategy, will be undertaken.
Housing Affordability Discussion Paper | January 2013 | City of Coquitlam
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Affordable Housing Reserve Fund Affordable Housing Reserve Fund
Alternative Approaches
The Affordable Housing Reserve Fund (AHRF) is seen as an important tool for
Following decisions to clarify the City’s role in this area, alternatives that can
contributing funds towards potential affordable housing solutions. The current
be explored as part of the HAS will examine if the AHRF could also be used to
balance of the AHRF is approximately $1 million.
initiate innovative responses such as:
Based on a continuation of the current density bonus system, the AHRF could
•
purchase plans, and freehold townhouses (may not require incentives);
gain significant funds in coming decades (e.g., $20-25 million projected over the next 20-25 years depending on development activity).
• •
housing affordability. Specifically, should the AHRF grow to be $20-25 million as projected, even with leveraged contributions from other governments, the fund would only create 200-300 new purpose built units over the next 20-25 years. This represents only a small fraction of the expected overall demand for lower cost housing in Coquitlam. Again, the extent of Coquitlam’s involvement in this area and specifically the exact contributions to the AHRF will need to be determined as part of a larger study that considers how the full range of City priorities are to be balanced. Given the high cost of purpose built deep subsidy affordable housing units, it is important to examine alternative ways to meet the affordability challenges in the City. Appendix 1 identifies numerous best practices that could be explored as part of developing a strategy for use of the AHRF.
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Housing Affordability Discussion Paper | January 2013 | City of Coquitlam
Government/non-profit solutions such as below market ownership, the use of leased municipal land, and intermediate rent programs.
in need. However, in addition to vastly expanding the role of local government in this policy area, this approach does have limited impact in terms of overall
Public/private ventures such as shared equity home ownership, affordable home ownership programs and community land trusts;
Traditionally, such funds in other communities have been allocated to the development of new purpose built deep subsidy housing units for those most
Private enterprise solutions including market rental “lock offs,” innovative
•
Promoting/pursuing joint Tri-Cities initiatives based on shared contributions.
Details on these and other approaches can be found in Appendix 1: Best practices in Housing affordability.
Effective Ways to Support Housing Affordability Many North American municipalities have adopted strategies to enable the development of a range of housing choices — tenures, types, sizes, and costs — and to address unique local housing issues. The table below illustrates which measures are perceived as most effective for each housing type. Type of Measure
Emergency, Transitional, Supportive and Non-Market Housing
Fiscal
Provision of land at below market
Market and Low-End of Market Rental
Affordable Housing Trust Fund
Entry -Level Home Ownership
Innovative Financing
Fee Relief - Waiver of Development Cost Charges (DCC’s), Fees, etc.
Regulatory
OCP and Neighbourhood Plans Inclusionary Policies Density Bonuses Housing Agreements Reductions in parking requirements
Separate parking cost from unit Smaller unit sizes Tenant Relocation Assistance
Smaller Lots
Secondary Suite Ready Housing Lock-off Units Carriage Houses “Flex Housing”
Innovative housing forms for smaller scale multi-family (2-4 units)
Expedite Approvals Process
Education and Advocacy
Guides for Developers Housing Needs Assessments, Data on Housing Market
Other Key Ingredients
Partnerships
Source: Based on Eberle, et al, 2011, Municipal Measures for Housing Affordability and Diversity in Metro Vancouver. Municipal staff were asked to rate each measure’s effectiveness
Housing Affordability Discussion Paper | January 2013 | City of Coquitlam
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Proposed Process This paper was written to provide background information and inform the development of a new Housing Affordability Strategy for the City of Coquitlam. The intent was not to set a course but rather to generate a
Proposed Next Steps Phase I Discussion/Decisions: Council Consideration
productive discussion and contribute to the development of a new Strategy.
Early in 2013 Council will be asked to:
Next steps will include investigating several key questions, including:
•
review/discuss this background material
Vision and Objectives
•
revisit the housing affordability vision and objectives
The 2007 Affordable Housing Strategy established a Vision as:
•
‘that all residents of Coquitlam will be able to live in safe, appropriate housing that is affordable for their income level’
consider and provide direction regarding the series of questions set out in the Introduction page of this paper
•
review and discuss the applicability of interim rental strategies as contained in the TDS
•
provide initial feedback on areas for further investigation
It is important to investigate if this is still the most appropriate vision for Coquitlam, and if not, to determine a revised vision to guide the Strategy update.
Phase II: Further Investigation
This paper has suggested moving from a Strategy focused on the roles
Depending on the direction determined in Phase I, further investigation and
the City plays to one that is more based on measurable Objectives.
development of specific of recommendations for:
What objectives are right for Coquitlam and what targets will we set for ourselves?
•
Planning and Regulatory Processes: Given our past successes in expanding secondary suites and other solutions what planning tools can we use to further increase the range of housing types, sizes and tenures to improve affordability?
•
The Use of City Resources: what is the role of City lands related to housing affordability, can we better balance the promotion of affordable housing with all the needs and services the City is trying to provide?
•
Affordable Housing Reserve Fund: what is the best approach to leverage the Affordable Housing Reserve Fund to meet City objectives; are there new best practices that Coquitlam can develop; which parts of the housing continuum is it appropriate to try to affect?
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Housing Affordability Discussion Paper | January 2013 | City of Coquitlam
Proposed Process Phase III: Public Consultation and Engaging Other Partners Once a draft framework incorporating the output of Phases I and II is complete and considered by Council, consultation will be undertaken with stakeholders, including the development community, community partners and agencies (e.g. Tri-Cities Homelessness and Housing Task Group), other levels of government, our municipal neighbours and the general public. Many of the ideas and values of the community will greatly contribute to the development of the Housing Affordability Update. It is important to engage the public and other partners in discussion regarding the draft strategy and its implementation.
Housing Affordability Discussion Paper | January 2013 | City of Coquitlam
APPENDIX Best Practices…in Housing Affordability
Housing Affordability Discussion Paper | January 2013 | City of Coquitlam
Best Practices…in Housing Affordability | 1 Cross-jurisdictional research reveals that there are many promising practices that promote housing affordability. While some of these have emerged from government initiatives or are innovations developed by non-market housing providers, many of them are products of private enterprises that have targeted housing affordably for middle-income, working families. The practices and projects which are briefly described in this report were selected as being the most relevant to Coquitlam. They are grouped into two categories – those that are principally initiated by private enterprise and those that are initiated either by government or non-profit organizations.
Freehold Townhouses
(PRIVATE ENTERPRISE)
Market Rental “Lock Offs”
(PRIVATE ENTERPRISE)
An owner of a freehold townhouse has “fee simple” (absolute) ownership and
This model was first used in resort communities. In Metro Vancouver, this model
is responsible for maintenance and utilities – the goal being to reduce monthly
has been pioneered at UBC and Simon Fraser University at UniverCity. The building
costs, and avoid a strata governance model. To ensure common exteriors, most
is designed to ensure that there is an easy compartmentalization of the overall
freehold townhouses have “design guidelines” registered on title. Typically,
unit, always including a separate, entrance, bathroom and small kitchen for the
freehold townhouses face the street, and have vehicle access via rear lanes.
“lock off”, so the homeowner can rent separately.
•
Carriage Housing
There are an increasing number of freehold townhouse projects in BC – Surrey, New Westminster, Langley and UBC have recent examples. ParkLane’s Bedford Landing project in Fort Langley was quickly absorbed, and resales have been strong. In Coquitlam, the Brae on Burke Mountain was also quickly sold-out.
Suite-Ready Detached Homes
(PRIVATE ENTERPRISE)
In Metro Vancouver, there has been a convergence of public and private interests in making new homes “suite ready”. For a developer / builder, the costs are relatively
Carriage housing (sometimes referred to as coach or laneway housing) is typically defined as a small detached dwelling that is secondary/ancillary to a principal house. Often built above or in place of a garage, a carriage house is located at the rear of a lot abutting a lane. Carriage houses are smaller in size than the primary dwelling on the lot. •
An increasing number of BC municipalities are permitting and promoting this form of housing, including Coquitlam, Vancouver, Port Moody, Maple Ridge and Kelowna.
•
Typically, these cannot be strata-titled, ensuring the dwelling remains rental in perpetuity.
•
Construction and utility hook-ups for carriage houses can be high, if not constructed at the same time as the principal dwelling, leading to higher rent levels than an inhome secondary suite (If a municipality is concerned that these units should remain affordable, a Housing Agreement with the land owner would be required).
small, but to a prospective buyer, a home that is “suite ready” is viewed as having considerable potential for future revenue generation. •
In Coquitlam, Moscone Developments ensures that its homes in Burke Mountain have secondary suite capability. Examples include: Gardenia, Belmont at the Foothills, and Nour at the Foothills. The marketing team observes that having a suite-ready home is a key selling feature, regardless of the household’s income. Burke Mountain’s luxury homes sell for between $700,000 and $1 million.
(PRIVATE ENTERPRISE)
Housing Affordability Discussion Paper | January 2013 | City of Coquitlam
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Best Practices…in Housing Affordability | 2 Small Scale Attached Housing
(PRIVATE ENTERPRISE)
Ownership of Manufactured Housing on Leased Land
Innovative small-scale duplexes, triplexes and quadruplexes are more
(PRIVATE ENTERPRISE)
affordable than a detached dwelling and can provide for affordable
This model of affordable ownership means that purchasers buy a manufactured
home ownership. However traditional side-by-side configurations do
house and lease the land. A percentage of the lease payments are used to build
not always provide the best site layouts for private outdoor space or
and maintain common amenities and undertake ongoing maintenance.
parking, nor are they always compatible with the character of established
•
neighbourhoods. Innovative approaches may include back-to-front, up-
affordable, practical alternative to site-built housing. This firm, with a focus
down, shared driveways, or garages at the rear. The City of Coquitlam’s
on moderate income seniors, is aggressively developing in BC.
Housing Choices program is leading to innovation and unique solutions
Innovative Purchase Plans – Private Builders & Developers
for small-scale attached housing.
Shared Equity Home Ownership
(PRIVATE ENTERPRISE)
Shared equity in market housing assumes that one of the investors (a non-market housing provider or social enterprise lender) assists a firsttime home buyer, then reduces its equity position. •
An interesting example is McPherson Place in Calgary, a 160-unit, inner
(PRIVATE ENTERPRISE)
In many urban markets, there are developers and builders who focus on the lower end of the home ownership market. Two examples – in Alberta and BC – provide an illustration of how developers help increase the market for their product through innovative purchasing plans. •
In Medicine Hat, Alberta, Classic Construction helps purchasers through direct down payment contributions and mortgage subsidies for up to seven years. A non-profit partner, the Medicine Hat Community Housing Society, provides training for potential home buyers and administers the mortgage subsidy. The City has contributed to the viability of Classic’s projects by amending density, greenspace and site coverage requirements. In Ontario, the Daniels Corporation provides condominium units at below-market prices, reduces the down payment for qualified buyers and offers a loan program.
•
In Sooke, BC, Citta Group, the developer of the phased 700-home Sun River Estates, is working with Genworth Financial to provide a “lender cash back equity program” for prospective purchasers who have an excellent credit history, but have yet to save the required down payment. The developer is also encouraging prospective purchasers to investigate CMHC’s homeowner mortgage loan insurance where the form of down payment is “nontraditional”, meaning any source that is arm’s length such as property, gifts, sweat equity, or lender cash back incentives.
suburb condominium. To qualify, purchasers must earn below 120% of median income, and currently spend more than 40% of their income on shelter. The financing system eliminates a down payment and reduces monthly mortgage payments to a more attainable level. The project was facilitated by INHOUSE, a not-for-profit organization whose mandate is to close the gap between rental housing and access to home ownership. •
A similar example in Ontario is a non-profit financial corporation, Home Ownership Alternatives (HOA), which has a unique mortgage instrument to make home ownership more affordable for lower income families – a second mortgage not to be repaid until sale. Since 1999, 2,300+ families have been assisted by this tool.
26
Parkbridge Communities is a leader in offering manufactured homes as an
Housing Affordability Discussion Paper | January 2013 | City of Coquitlam
Best Practices…in Housing Affordability | 3 Affordable Home Ownership – Peak Program, Calgary
Inclusionary Zoning/Density Bonusing
(PRIVATE ENTERPRISE & NON-PROFIT)
This practice emerged in US greenfield communities where low and
Launched in 2010, the PEAK program provides the down payment and a monthly
moderate income households were priced out of the housing market,
mortgage subsidy for the first five years of ownership. This is a partnership
usually resulting in a workforce that had to commute from other areas. In
among Trico Homes (private developer), Habitat for Humanity, and Alberta
BC, the legislation was amended in 1993 to facilitate this practice at the
Housing and Urban Affairs. The first 64 units are located in a north-west suburb,
time of rezoning.
close to schools, transit, amenities and recreation. Two other projects are under
•
construction. Depending on the number of years of ownership, the equity
housing. There is no direct public expenditure, but there is usually a
Peak homeowner. After the second year of ownership, the homeowner receives
restriction or capping on resales or rents, with the objective being to
100% of the property’s equity appreciation if the home is sold. (NON-PROFIT)
The community land trust (CLT) model is becoming an increasingly popular mechanism for maintaining and expanding the stock of permanently affordable
Regionally, Burnaby, Port Coquitlam, Surrey, and New Westminster have used amenity contributions from rezoning for affordable
appreciation of the property may be split between Habitat for Humanity and the
Community Land Trusts
(GOVERNMENT)
ensure the housing remains affordable. •
The City of Coquitlam has taken this approach with the Fraser Mills development.
housing. Each community land trust is a non-profit organization with charitable tax status. The trust purchases land and then enters into a ground lease with the owner of the home, thereby removing land from the speculative market. In some communities, the properties are existing single homes in a variety of neighbourhoods, while in others it may be new build townhouses or apartments. The CLT qualifies eligible households and manages the waiting list. Some CLTs are able to offer “gap funding” (down payment assistance) from grants they receive from governments and philanthropic organizations. •
In BC, there are CLT’s with a mandate for creating affordable housing in a few communities, including Vernon and Denman Island.
Housing Affordability Discussion Paper | January 2013 | City of Coquitlam
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Best Practices…in Housing Affordability | 4 Municipal Land for Affordable Housing
(GOVERNMENT)
Several municipalities in Metro Vancouver have either formally
was made possible through a partnership between VanCity Enterprises and the
established a “land bank” of municipally-owned lands for future
SFU Community Trust. The University provided the land lease at a significantly
affordable housing, or entered into partnerships whereby municipally-
reduced rate and VanCity, as the developer, took a lower profit than is typical on
owned land was donated or leased for affordable rental housing in the
this type of residential development.
same way as Como Lake Gardens and 3030 Gordon. Examples from other
Harmony Flex-Townhouse – Abbotsford
municipalities: •
•
•
(GOVERNMENT & NON-PROFIT)
In the past two years, the City of Surrey has provided land and
As part of its commitment to affordable housing, the City of Abbotsford partnered
waived municipal fees and charges for two projects – Alder Gardens,
with private developer Van Maren Construction to build 11 townhouses with
36 apartments for women and children at risk of homelessness,
“finishable” bachelor suites that owners can rent out. The City provided a $5,000
and Quibble Creek, 52 supportive housing units and 15 short-term
reduction in property taxes, parking and setback variances, and made a donation
transitional recovery beds. The total value of the City’s land equity is
of land at 20% of market value. CMHC also played a key role by providing start-up
approximately $3.4 million.
funds to make the bachelor suites accessible, and other mortgage flexibilities. The
In Maple Ridge, the District provided land valued at approximately $1
long term affordability is achieved through a covenant with the City to sell the
million for a new development that will create 45 units of supportive
homes at 26% below market value.
housing for people who are homeless or at risk of homelessness.
The Quattro Micro-suites – Surrey
In Abbotsford, the City provided land valued at approximately $1.36
(PRIVATE ENTERPRISE)
million and waived property taxes and DCCs for a new supportive
56 micro-units will be part of a complex to be built by Tien Shier at Whalley Boulevard and Grosvenor Road. The units will range from 290 to 653 square feet and will range in price between $109,000 and $183,000.
housing development. This 41-unit building will contain a mix of studio and 1 to 4-bedroom apartments for single women or women and children at risk of homelessness in the Fraser Valley.
Below Market Home Ownership – Simon Fraser University (NON-PROFIT)
Completed in 2007, the Verdant is staff and faculty housing of 60 townhomes that are sold at approximately 20% below market value. These units can appreciate with real estate value, but final sale prices are 20% below current market value. SFU manages the wait list and
28
approves the assessment and subsequent reduction in price. The development
Housing Affordability Discussion Paper | January 2013 | City of Coquitlam
Best Practices…in Housing Affordability | 5 Affordable Rental & Ownership – People with Developmental Disabilities
•
In Surrey, the Surrey Rent Bank was established to prevent low income singles and families from becoming homeless or having their
(GOVERNMENT & NON-PROFIT)
utilities disconnected. The pilot project is an initiative of a non-profit
Under One Roof is the name of a six-unit project in Vernon that was built
society (Newton Advocacy Group) with funding from credit unions,
through the combined efforts of many partners – a local community land trust,
the City of Surrey and charitable foundations. The average loan is
social planning council, Kindale Development Association, the City of Vernon, BC
about $800, which clients have two years to repay.
Housing, Habitat for Humanity, the Real Estate Foundation, Okanagan College, and more than 100 Vernon-area businesses. In addition to leasing City-owned
•
Mennonite Central Committee with funding from Coast Capital
land for a token amount, the City waived Development Cost Charges. The
Savings, the United Way, the federal government, and charitable
building is strata-titled. Two of the partners rent their units to low-income
foundations. In 2011, more than 200 people have received micro-
families and people with developmental disabilities. The sixth unit, built through Habitat for Humanity is now privately owned.
In the Fraser Valley, a rent bank program is administered by the
loans, repayable within two years. •
In Vancouver, philanthropist Frank Giustra has made a sizable
Intermediate Rent (GOVERNMENT & NON-PROFIT)
donation to the Streetohome Foundation that will enable the
“Intermediate Rent” is an approach in use in Great Britain, particularly in areas
organization to get a rent bank underway in 2012.
where key workers are challenged to find affordable rental housing. The model is managed by non-market housing providers who own or lease an existing dwelling, then sub-lease it at a below market rent – typically, 20% lower for a period of six months.
Rent Banks
(GOVERNMENT & NON-PROFIT)
In Ontario, the Provincial Rent Bank Program is funded by the Government of Ontario but administered by local governments. Under the program, tenants facing eviction for non-payment of rent can apply to receive financial assistance. If the application is approved, the outstanding rent is paid directly to the landlord. Each municipality decides whether the assistance is in the form of a grant or an interest-free loan.
Regeneration of Non-Market Rental & Co-ops
(NON-PROFIT)
To make the best use of their land and building assets, some nonprofits, especially faith-based groups and seniors housing societies, are considering options to “regenerate” the properties they have owned or controlled for some time. Typically, the land value has appreciated considerably while the value of the “improvements” (housing) is static or declining. The regeneration model (renovate, retrofit, redevelop) and objectives depends on the individual project and society. There a number of older non-profit and cooperative housing complexes in Coquitlam that could be good candidates for regeneration. The Hoy Creek Housing Co-op currently has a redevelopment application underway. The Kiwanis Towers
While there is not a similar program in BC, there are several rent banks operating
redevelopment in Richmond will provide 296 units of low-end of market
or about to open in Metro Vancouver.
rental housing for seniors.
Housing Affordability Discussion Paper | January 2013 | City of Coquitlam
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Prepared with assistance from
